Ideas to Action:

Independent research for global prosperity



December 10, 2007

Macro Aid Effectiveness Research: A Guide for the Perplexed - Working Paper 135

The argument about whether foreign aid "works" rages on. Recently, Paul Collier sought a practical middle path between William Easterly's development pessimism and Jeffrey Sach's development boosterism. How can smart people draw such contradictory conclusions from the same data? This new working paper by CGD research fellow David Roodman answers this question by describing consensus where it exists and identifying sources of controversy. Roodman concludes that, while aid has eradicated diseases, prevented famines, and done many other good things, given the limited and noisy data available, its effects on growth in particular probably cannot be detected.

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November 26, 2007

Round Five Of The MCA: Which Countries Are Most Likely To Be Selected For FY2008?

On December 12, the Millennium Challenge Corp. (MCC) Board will choose which countries are eligible for FY2008 funding in what may be the toughest selection round to date. With funding tight, new countries passing the performance test, half of the countries with signed compacts failing, and an MCC decision to shift its focus to implementation, this round should test the MCC's adherence to its principles and perhaps set new standards. As it does each year, the MCA Monitor team takes a hard look at tough choices and predicts which countries the MCC Board is likely to choose.

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November 16, 2007

The Impact of FY2008 Funding Options on the MCA: From Saving Face to Saving the Program

Amid a contentious FY2008 budget round between Congress and the White House, foreign assistance -- particularly that for development -- may face cuts during negotiations. The Millennium Challenge Account (MCA) -- one of few U.S. foreign aid programs specifically targeted to long-term development objectives -- is especially vulnerable. In a new MCA Monitor Analysis, senior policy analyst Sheila Herrling presents a path forward for Congress and the administration to address the real issues hindering MCA implementation, and argues against an amendment introduced by Senator Lugar to change the MCA's compact funding obligations policy because it erodes key innovations that distinguish the MCA from other aid programs.

October 25, 2007

The Commitment to Development Index 2007 Report

Each year since 2003, the Commitment to Development Index (CDI) has ranked 21 rich countries on their dedication (or not!) to policies that benefit the five billion people living in poor countries. The CDI moves beyond simple comparisons of aid funding and in so doing embodies the mission of CGD, which addresses all government policies that affect poorer countries. This report summarizes the results of this year's Index, discusses key ideas that underpin each component and shows how countries' scores have changed over time.

October 22, 2007

Which Countries Might Trip on the Millennium Challenge Account Corruption Hurdle?

The Millennium Challenge Corp. (MCC) will soon release performance data that will form the basis of its FY2008 country selection round. The only indicator that countries must pass to qualify for MCC money is Control of Corruption. CGD's Sheila Herrling and Sarah Rose have crunched the numbers for the corruption indicator data and offer an early preview of which countries will clear the hurdle—and which are likely to trip. In early November the MCA Monitor team will release their predictions of which countries will be deemed eligible for Millennium Challenge funding. The MCC Board is scheduled to announce its decision on December 4.

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October 10, 2007

The 2007 Commitment to Development Index: Components and Results

This CGD brief summarizes the results of the 2007 Commitment to Development Index (CDI), which ranks 21 of the world's richest countries on their dedication to policies that benefit the five billion people living in poorer nations. The Netherlands comes in first on the 2007 CDI on the strength of ample aid-giving, falling greenhouse gas emissions, and support for investment in developing countries. Close behind are three more big aid donors: Denmark, Sweden, and Norway.

September 27, 2007

Millions Saved: Proven Successes in Global Health (2007 Edition)

In 2004 a working group of experts was convened by the Center for Global Development to identify cases in which large-scale efforts to improve health in developing countries have succeeded—saving millions of lives and preserving the livelihoods and social fabric of entire communities. Seventeen of these cases were originally captured in CGD's enormously successful book Millions Saved: Proven Successes in Global Health. This brief is based on the new edition of the book, titled Case Studies in Global Health: Millions Saved published by Jones and Bartlett in 2007, which documents three new successes in Nepal, Chile, and India, and updates to the 17 original success stories.

September 17, 2007

Aiding Transparency: What We Can Learn About China Exim Bank's Concessional Loans - Working Paper 126

Aid experts interested in China's rapidly expanding development assistance program—particularly in Africa—have been frustrated by lack of information. How much aid is Beijing giving, and to whom? In this new working paper, Paul Hubbard fills in a piece of the puzzle by using Chinese-language sources to review the concessional lending program of China's Export-Import Bank. He finds that more than 48 countries have agreements with China's Exim Bank for concessional loans, and that the average loan of US$20-30 million is typically made available to Chinese exporting firms to develop infrastructure and facilities in developing countries.

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September 10, 2007

Helping the Bottom Billion: Is There a Third Way in the Development Debate?

Paul Collier's new book, The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It, argues that many developing countries are doing just fine and that the real development challenge is the 58 countries that are economically stagnant and caught in one or more "traps": armed conflict, natural resource dependence, poor governance, and geographic isolation. In a review of the book recently published in Foreign Affairs, CGD research fellow Michael Clemens explores whether or not Collier's proposed solutions constitute a practical middle path between William Easterly's development pessimism and Jeffrey Sach's development boosterism.

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August 27, 2007

Investing in People by Investing in Data: How Best to Incorporate the New MCA Eligibility Indicators

The board of the Millennium Challenge Corporation will soon decide how to incorporate two new natural resources indicators—a Natural Resource Management Index (NRMI) and a Land Rights and Access indicator—into the FY2008 country selection process. In a new paper by CGD’s MCA Monitor team, Sarah Rose, Sheila Herrling, and Steve Radelet explore how to integrate these new indicators into the MCA's three eligibility criteria categories: Ruling Justly, Investing in People, and Economic Freedom. They recommend adding the Land Rights indicator to the Economic Freedom category, and the NRMI to Investing in People. They also urge the MCC to offer incentives for a third party to create an educational quality indicator, thereby bringing the total number of investing in people indicators to six, equal to the number of indicators in the other two categories.

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August 13, 2007

A Note on the Theme of Too Many Instruments - Working Paper 125

*REVISED Version May 2008

In development economics, statistical analysis usually begins with data from many observational units--households, companies, or countries--over just a few time periods. Two analysis techniques are becoming popular for studying causal relationships among variables in this "short panel" setting but their implementation may produce false results. In this new working paper CGD research fellow David Roodman shows how inaccurate results can skew the development debate and offers some simple techniques for reducing the risks.

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July 23, 2007

Does the IMF Constrain Health Spending in Poor Countries? (Brief)

This brief summarizes the findings of the CGD working group on IMF Programs and Health Spending, convened in fall 2006 to investigate the effect of International Monetary Fund (IMF) programs on health spending in low-income countries. The report offers clear, practical recommendations for improvements—for the IMF, the World Bank, the governments of countries working within IMF programs, and civil society organizations.

David Goldsbrough
July 23, 2007

Does the IMF Constrain Health Spending in Poor Countries? Evidence and an Agenda For Action

This report of the CGD working group on IMF Programs and Health Spending explores the controversy that surrounds IMF-supported programs in low-income countries and their effect on the health sector. Critics contend that programs unduly constrain health spending though macroeconomic, especially fiscal, policies that are too restrictive towards government spending and wage bill ceilings preventing a scaling up of the health workforce. The working group, chaired by CGD visiting fellow David Goldsbrough, examined the evidence through detailed case studies and cross-country data to make recommendations for the IMF and other relevant actors. They urge the IMF to explore a broader range of options on the fiscal deficit and government spending; clarify the role of the IMF with regards to aid projections; constrain the use of wage bill ceilings to very specific circumstances; and give greater emphasis to the smoothing of expenditures.

David Goldsbrough
July 9, 2007

A White House Focus on Social Justice in Latin America?

A White House conference on social justice in Latin America this week may signal a shift to U.S. engagement with the region that goes beyond security, free trade, and anti-narcotics efforts. CGD president Nancy Birdsall and Peter Hakim, president of the Inter-American Dialogue, suggest seven ways that the U.S. could more effectively support Latin American efforts to address persistent inequality--starting with a more effective approach on trade and drugs.

Peter Hakim
June 27, 2007

The Chinese Aid System

Chinese foreign aid is rising fast and Western aid agencies are concerned: will Chinese aid undermine efforts to promote reform in Africa and elsewhere? Will Chinese loans burden poor countries with fresh debt? In this new essay, CGD visiting fellow Carol Lancaster provides a concise and accessible overview of what is known--and not known--about the Chinese aid system. She advises aid agencies in Europe, North America and Japan to increase communication and to seek opportunities for collaboration with Beijing.

Carol Lancaster
June 25, 2007

Greater Than the Sum Of Its Parts? Assessing "Whole of Government" Approaches to Fragile States (Brief)

Fragile states--countries defined by poverty, weak governance and often violent conflict--represent a major development challenge for today's global aid community and a significant threat to global security. This CGD Brief offers recommendations for how donors can best engage weak countries, including by experimenting with pooled funding arrangements, developing unified national strategies and by evaluating the impact of their interventions.

Stewart Patrick and Kaysie Brown
June 11, 2007

The World Bank's Work in the Poorest Countries: Five Recommendations for a New IDA

This CGD working group report offers five practical recommendations for strengthening the International Development Association (IDA)--the World Bank's soft-loan facility for the world's poorest countries--as donors begin replenishment talks that will shape IDA's course from mid-2008 through mid-2011. Among the recommendations: affirm IDA's central role in the international aid system; focus on core tasks; don't hold IDA hostage to broader geopolitical issues; get serious about finding ways to help fragile states; and sharpen incentives for performance.Learn more

The IDA-15 Working Group